Investors are opening their wallets once again to biotech companies, after shying away from the risky ventures amid a recession.
Private biotech companies drew $888 million during the second quarter, a 54 percent increase over last year, according to a report from PricewaterhouseCoopers and the National Venture Capital Association. Medical device firms attracted $628 million in investment from April to June, a 38 percent increase compared with the same period in 2008.
In Maryland, Washington, D.C., and Virginia, venture capital firms invested $14 million in biotech companies, a 16 percent increase compared with last year.
The uptick is a sharp turnaround compared with the first quarter, when investment in biotech firms fell 46 percent to $577 million and investments in medical device companies fell 27 percent to $412 million. That was the lowest funding level in 12 years.
“The money is starting to loosen up,” said Richard Zakour, executive director of industry advocacy group MdBio. “We’re being a little optimistic.”
Among the local companies to attract venture funding are:
• Arginetix Inc., which is developing treatments for hypertension and other conditions, raised nearly $11 million this month. The Lutherville company’s investors include Philadelphia’s Quaker BioVentures and MedImmune Ventures, a subsidiary of the AstraZeneca Group.
• Glen Burnie company Sleep Solutions Inc., which raised $20 million that it will use to develop treatments for sleeping disorders.
• Baltimore’s BioMarker Strategies, led by CEO Kären Olson, recently raised $1.7 million to create a prototype of a diagnostic device to test drugs for breast, lung and pancreatic cancer.
• Gliknik, also of Baltimore, which raised $1.1 million that it will use to develop new drugs to treat autoimmune diseases and cancer.